May 9 (Bloomberg) -- American International Group Inc. is close to selling its Tokyo headquarters building to Nippon Life Insurance Co., Japan’s largest life insurer, for about $1 billion, a person familiar with the situation said.
An agreement for the 15-story tower in central Tokyo’s Marunouchi district may be announced as early as next week, the person said. Negotiations are continuing, said the person, who declined to be identified because the talks are private.
The property is in the most expensive office district in Japan, next to the Imperial Palace, making a potential sale a benchmark for commercial real estate prices. AIG, based in New York, is selling property and businesses after being bailed out four times by the U.S. government. The company has tapped about $45.5 billion from a U.S. credit line as of last week.
“It doesn’t sound like a distressed price,” said Peter Slatin, editorial director of Real Capital Analytics Inc., a New York-based firm that tracks commercial property sales. “If you compare that to the big asset sales we’ve had in the U.S. this year like One Beacon, and Hancock and 1540 Broadway, it sounds like a premium to those.”
Peter Tulupman, an AIG spokesman, declined to comment. Akira Tsuzuki, a Nippon Life spokesperson in Tokyo, didn’t return an e-mail message left for comment after regular business hours.
Commercial values in Tokyo, the world’s third most expensive office market after London and Hong Kong, fell 6.1 percent in 2008, the Ministry of Land, Infrastructure, Transport and Tourism said in March. Tokyo’s office vacancy rate rose for the 15th month in April as companies cut spending in the recession. The rate jumped to 6.8 percent from 6.1 percent, real estate brokerage Miki Shoji Co. said in a report issued May 7.
Property Assets
Nippon Life has 44 trillion yen ($447.1 billion) in assets and held 1.75 trillion yen of real estate assets as of March 31.
Nippon Life is planning to increase its investments in stocks by as much as 100 billion yen for the financial year through March 31, 2010, Tomiji Akabayashi, general manager of the insurer’s finance and investment planning division, said in an interview last month. It plans to maintain its real estate investments at the current level.
AIG was first rescued in September after a liquidity squeeze caused by credit-default swaps the insurer sold to banks to protect them against losses tied to subprime mortgages. So far the company has struck deals to raise about $4.4 billion by selling assets including a U.S. auto insurer.
AIG is also considering selling its worldwide headquarters at 70 Pine St. in lower Manhattan and another property at 72 Wall St., according to a March 18 statement.
The shares rose 6 cents to $2.01 at 4:11 p.m. in New York Stock Exchange composite trading. They’ve declined 96 percent in the year through yesterday and are up 28 percent since Jan. 1.
Yomiuri newspaper reported the potential sale yesterday.
* Yahoo! Buzz
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment